Cara Therapeutics (NASDAQ:CARA), Inc., a biopharmaceutical company with a market capitalization of $21.53 million, announced today that it has successfully regained compliance with the Nasdaq's minimum bid price requirement. The company's common stock, traded under the ticker NASDAQ:CARA, maintained a closing bid price of at least $1.00 per share for ten consecutive business days. According to InvestingPro data, the stock is currently trading near Fair Value, with shares at $4.65 showing a -24.84% year-to-date return.
The compliance issue arose when Cara Therapeutics initially received a notification from the Nasdaq on February 1, 2024, regarding its failure to meet the minimum bid price requirement over a thirty consecutive business day period. The company was initially given 180 calendar days to rectify the situation, which was later extended by another 180 days, ending on January 27, 2025. InvestingPro analysis reveals concerning fundamentals, including weak gross profit margins and rapid cash burn, with 10+ additional key insights available to subscribers.
To address the noncompliance, Cara Therapeutics' stockholders approved a reverse stock split and a reduction in the total number of authorized shares during the 2024 Annual Meeting of Stockholders on June 4, 2024. The board of directors then executed a one-for-twelve reverse stock split on December 19, 2024. Trading on a post-split basis commenced on December 31, 2024.
In addition to the bid price issue, Cara Therapeutics received a notice on November 19, 2024, for not meeting the Nasdaq's stockholders' equity requirement. The company submitted a compliance plan, which included a proposed merger with Tvardi Therapeutics, Inc. As a result, Nasdaq granted an extension until May 19, 2025, for Cara Therapeutics to meet the stockholders' equity requirement.
The merger with Tvardi, which is still pending, is expected to fulfill the criteria for initial listing on the Nasdaq Capital Market, including a higher minimum bid price and stockholders' equity requirement. However, there is no assurance that the merger will be completed within the extension period or that Cara Therapeutics will maintain its listing.
With the next earnings report due on February 26, 2025, InvestingPro subscribers can access comprehensive analysis and detailed financial metrics to better evaluate the company's prospects through our exclusive Pro Research Report, available for over 1,400 US stocks.
This report is based on information from a SEC filing and does not constitute an offer to sell or a solicitation of an offer to buy any securities.
In other recent news, Cara Therapeutics has enacted a 1-for-12 reverse stock split, effectively reducing the total number of authorized shares from 200 million to approximately 16.67 million.
Additionally, the company has announced a definitive merger agreement with Tvardi Therapeutics, Inc., with the combined entity set to focus on the development of treatments for fibrosis-driven diseases. The merged company will be comprised of approximately 17% pre-merger Cara stockholders and about 83% pre-merger Tvardi investors.
As part of this strategic move, Cara has agreed to an asset purchase agreement with Vifor Fresenius Medical Care (NYSE:FMS) Renal Pharma, Ltd., selling certain assets and rights related to Korsuva®/Kapruvia®. The combined company will concentrate on advancing Tvardi’s pipeline, including TTI-101, which is currently in Phase 2 trials for idiopathic pulmonary fibrosis (IPF) and in Phase 1b/2 trials for hepatocellular carcinoma (HCC). These are recent developments in the company's operations.
The merger, which has been approved by both companies' boards, is expected to close in the first half of 2025, subject to stockholder approval and other customary closing conditions. As per InvestingPro's analysis, despite recent challenges, Cara maintains a healthy liquidity position with a current ratio of 4.77, indicating its strong ability to meet short-term obligations.
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